Online auctioneer eBay slows its decline as PayPal pays off

AUCTION website eBay reported a 29 per cent fall in second-quarter profit yesterday, but saw its shares rise as it beat analysts&rsquo; expectations.<br /><br />Net profit was $327.3m (&pound;199m), or $0.25 a share, down from $460m, $0.35 a share, in the equivalent quarter of 2008, while revenues fell marginally, down to $2.1bn from $2.2bn.<br /><br />Excluding one-off items, eBay booked a profit of $0.37 a share, just ahead of a consensus forecast of $0.36.<br /><br />The total value of all goods sold on the website fell by 10 per cent, a slowdown in deterioration from the first quarter when gross merchandise volume slumped by 16 per cent.<br /><br />Revenues in the company&rsquo;s core online marketplace business fell by 14 per cent, but this was offset by a strong performance from online payment service PayPal, where revenues rose 11 per cent.<br /><br />&ldquo;We drove solid second quarter results, with strong momentum and market share gains at PayPal and continued stabilisation in our core eBay business,&rdquo; said chief executive John Donahoe.<br /><br />&ldquo;I&rsquo;m pleased with our pace, our progress and our performance,&rdquo; he added.<br /><br />Donahoe has been moving eBay in the direction of fixed-price sales, as the online auction arena fills up with heavyweight competitors such as Amazon.<br /><br />The company issued a forecast for the third quarter that was broadly in line with Wall Street&rsquo;s expectation of a $0.35 a share profit, predicting that it would earn $0.34-$0.36.<br /><br />Shares in the online auctioneer closed up 2.75 per cent at $19.45.